Economic indicators continued to show improvements in April, making the recovery more sustainable:

1) HSBC’s Purchasing Manager Index remained at the expansionary level and even picked up slightly from last month’s level . The combination of these indicators is giving a signal that confidence among producers is gradually and sustainably recovering.

2) Inflation continued to be low in April (0.02% MoM4), driven by an unexpected decline in fuel retail prices and a drop in the food and foodstuffs category, despite the increase in health care prices. As inflationary pressure is under control, another policy rate cut is likely to occur, hinted by deposit rates reduction by large commercial banks such as Vietcombank and BIDV. Rate cuts are likely to help lower borrowing rates further. In fact, our recent visit to Vietnam this month showed that companies…

“The historic economic and social transformation of China which has been evidenced in the past three to four decades has and will continue to have huge potential implication for international agricultural markets. China, which now holds one-fifth of the world’s population, is endowed with little arable land and water supplies relative to its population base.”

– Organization for Economic Cooperation & Development (OECD) and the United Nation’s FAO in a joint report on the outlook for agriculture released this month. The nation’s rising population, urban expansion and growing wealth are coupled with a reduction in the quality and amount of land and water available for farming, the report said. China’s largest pork processor is poised to takeover US based Smithfield Food as the pressure encourages companies to look overseas to meet food demand.

CAUGHT IN THE HAZE: INDONESIAN BURNING OF PLANTATIONS COVERS SINGAPORE IN SMOKE

The use of fire to clear land is outlawed but weak enforcement means the ban is largely ignored as this method of clearing land is 40 times cheaper…

“I met approximately 25 agricultural companies and understand that there is genuine demand for investing not only in farms but more importantly, food processing plants and various technologies associated with food production. Chinese companies are often only interested in very large scale assets.”

– Doug Ferguson, partner in charge of the Asia business group with KPMG Australia to Bloomberg News.

China’s rapid urbanization, pollution and limited supply of arable land and water is prompting the nation to increase trade and investment with countries in southeast Asia, Australia and New Zealand, according to Ferguson who recently returned from China. Food security is “critically important,” to the Chinese government, he notes.

British farmers have steadily increased the use of potent antibiotics over the last decade, raising concern over the risk of antibiotic-resistant strains of bacteria escaping and infecting people.

Clinical medicines used to treat meningitis, pneumonia, tuberculosis and HIV-related infections have all seen increased farm use of at least 50% from 2003-11 – medicines that the World Health Organization has flagged…

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